IMPAIRMENT

According to IAS 36, the goodwill created out of a transaction and all other intangible assets without a defined life-span are assessed every year and subject to an impairment test following the occurrence of specific events (Triggering Events). IFBC offers support during:

testing of the impairment models used according to IFRS requirements and current best practice

development and realisation of customised, IFRS-compliant models that enable a standardised approach to be followed

determination of the cost of capital for the impairment

Impairment models have to be tested regularly for IFRS-compliance and should be imbedded within an efficient process

The IFRS-compliance of the impairment models as well as the quality and accuracy of the data used (especially cost of capital) should be tested periodically. Our standardised approach allows us to assess the impairment testing efficiently with regard to IFRS-compliance and best practice and to establish any requirement for adaptation of processes, models and valuation parameters.

Standardised processes and models reduce time expenditure and enhance security during impairment testing

The implementation of standardised processes and models for impairment testing can ensure both efficient processing as well as a high degree of certainty.

IFBC tests the Impairment-WACC of various quoted companies each year

The cost of capital play an important role in the financial management of a company. Their different fields of application (e.g. CAPEX, acquisitions, value based management and IFRS) should thus be brought together within a holistic cost of capital concept. The WACC used for performing the impairment tests has to comply with the IAS 36 requirements as well as Corporate Finance principles.